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Misleading Real Estate Advertising

Misleading Real Estate Advertising

Hey there Savvy Home Buyer and Sellers this is Jeff O’Leary, “The Village Guru” Mississauga Real Estate Broker and in today’s video I’m going to go over the ‘Top 5 Misleading Advertisements in Real Estate.’ This video is good for everybody buyers or sellers, because
you’re going to want to understand that not everything is what it seems. So without further ado let’s get right into it! As a real estate broker I notice all
real estate advertising I mean I can’t help it it’s the industry I’m in. Now, I see some really good advertising and then I see some not good advertising but today what I’d want to talk about is actually misleading advertising because there’s a ton of it in the industry and I think as a consumer you need to
understand when something sounds too good to be true or it’s not quite what
it is so let’s get right into it. #1 – Guaranteed Sales Program Guys, this trick has been going on for the last 30 40 years and there’s a lot of trainers out there teaching real estate salespeople to offer the guaranteed sales program you might have saw it on a sign or a billboard and it goes something like this, “I’ll sell your house in 60 days or I’ll buy it.” Now think about it for a minute… Your real estate person, if they had to buy
every client’s house that was for sale well then why are they in the business
of selling real estate? The reality is they very rarely if ever… actually buy their clients house and if it ever gets to the point where they’re gonna buy your house trust me they’re making such a killing off it that they’re going to turn around and flip it the next day because on any of these ads if you notice the fine print might say “***” and you’re gonna have like 30 different
conditions and one of the conditions is basically, “Hey, I’ll write you up an offer on
your house” “but I need an appraisal and then on top of that appraised value” “I’m going to make you an offer for say 10% below” “that appraised value to cover my costs
of either flipping it to my investor friends” “or buying it myself and turning
it for a profit” So let me break it down in realistic numbers, let’s say you have a house that’s worth $700,000 maybe it needs a little bit of work and it had a hard time selling and you see this advertisement for “I Guarantee to Sell Your House or I’ll Buy it” Now, it can be pretty tempting because maybe you have got to move in the next couple of months. So you call this guy up, he comes in and he goes, “okay I will appraise your house and I’ll give you an offer” “If we can’t sell the house” So if your house is worth 700k he may come in and it gets appraised at 680k so he’ll turn around and offer you 610k. At $610,000 he knows (or she) as a professional that they can turn around and flip that house anyway… but what’s worse is, now if you agree to that agreement you’ve basically told him… “I’ll sell it for anything above $610,000” which would be wrong! So if he brings you an offer for $615,000 what are you going to say? “Well I’ll buy (the house) for 610k but this
(offer) is better… do you get what I mean? At the end of the day it’s just a marketing ploy to get into your door and start the high-pressure sales tactics so be aware of the “Guaranteed Sales Programs” Misleading advertising #2 Inflated Sales Statistics. Real estate agents are always struggling to differentiate themselves from the hundreds and millions of other ones in the universe and one way they do that is by teaming up and inflating sales statistics. Have you ever noticed that you’ll see realtors saying, “I’m the number one agent in this town and I sell 500 homes a year” or whatever guys, I’ll be honest, it’s impossible as one salesperson to sell that many houses if you just calculate the hours involved
in the labor involved it doesn’t work that way. What they do is they build teams where the one team leader takes all the credit for all the sales of the entire group and then is able to go out there and advertise it as if they personally sold all those houses. Let me give you an analogy that I’ll explain it If you like hockey… Let’s say you take the Maple Leafs and Austin Matthews is the best player on the team right now. Now he may score 40 goals, 45 goals a year and he’s an all-star, a great player. Now what happens if I told you that Austin Matthews took all the credit for ALL the goals on the
entire team and he actually scored 400 goals a year? Well, I think you would actually just flat out call me a liar right? But that’s exactly what’s happening in the real estate industry they’re taking all the sales stats for
everybody on their team and they’re putting it into one person. So when we’re talking about sales statistics just be aware are they your (agent’s) sales statistics or are they for the entire team? At the end of day, I’m not “anti team” but… as consumers I think sometimes we get confused as to what actually someone is doing. Misleading Advertising #3 “If you buy this house I’ll buy yours!” It’s pretty much the same as the guaranteed sales program basically they’re trying to sell a house that they’re having a hard time selling and in that case they’ll offer to buy yours which really means, “I’ll buy yours once I’ve tried to sell yours” “and at the same time again if I
actually have to buy it” “it’s gonna be for way below market value that way I can flip it and make a profit” So again, be weary, there’s no such thing as guarantee’s in real estate only numbers and facts. Misleading sales advertising #4 For Sale By Owner companies. I couldn’t leave them out guys I mean I’m honest I trash on everybody! I love for Sale By Owner companies because they’re in a real battle with Realtors, I mean I get it If I was running one of those companies I’d be trashing all my competitors too and one way they do it is by constantly referring to how much money you save in Commission if you sell the house through their services but here’s the deal guys and this is something they don’t disclose to you couple of really cute things… Number one there’s a lot of statistics from the National Association of Realtors you can go on MLS and pull the numbers… if you’re for Sale By Owner you’re probably selling for lower than you are through a realtor so you got to keep that in mind when you’re selling the house. Number 2, and something that they never talk about is that a lot of times there’s a buyer
agent involved with a for sale by owner so when someone goes on one of those
companies that list their house for sale on the MLS more often than not… another agent, a buyer’s agent is going come with their client so you’re ending up paying a commission anyway and that’s fine because maybe you save a little bit on the selling side but it’s not as much as they claim because they always say they always pick the highest commission possible and they say you’re gonna save
all of it when in reality maybe you’re only saving 1% or 2% okay so you got to be
really clear. At the end of the day, if you want to sell your house knock your socks off, I wish you all the best of luck offer a commission and If I have a buyer,
we’re willing to do a deal just be wary that these savings most of the time or not as big as these companies are claiming. Finally misleading advertising #5 Inaccurate information on the MLS. Home buyers tend to think that the MLS is “gospel truth” and the problem is that the MLS is filled
out by the real estate agent. So the biggest things I see that are misleading are square footage all the time I see taxes mislead and I see other factors such as condo fees… kind of “fudged” “oh, I forgot about that raise in condo fees…” Be aware that while the MLS is a good guide you need to always double-check all your facts and figures before you offer on a house. That means you real estate person needs to go to public records and
pull the square footage. That means they need to confirm the taxes because savvy realtors know that some investors look at the taxes as an indication of value so if they lie on them and say there are more taxes then some buyers will assume
that property is valued more. So be careful, always verify the information and don’t take anything off MLS… than more than just a guide. Well there you have it I hope you enjoyed my video on Five Misleading ways that advertising
happens in real estate. If you like this video give it a thumbs up subscribe to my channel and share it with your friends I’m Jeff O’Leary, “The Village Guru” Thanks for watching and we’ll see you soon!

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